Finding out how much money you could make from an investment can help you find the best savings rates and choose an account that will yield the highest return. Using a money market calculator is a great way to find out what the total interest and total contribution amount will be to provide you with your final return. A money market calculator helps to narrow down your decision when choosing a bank or credit union to invest with.
What is a money market?
A money market account (MMA) is similar to that of a savings account as you put money into an account and earn interest from it. Unlike conventional savings accounts, money market accounts will offer higher interest rates. With money market accounts many people will end up using them as a supplement to their retirement or as ways to earn money for short-term financial gains. Banks tend to offer higher interest rates on money market accounts than they do savings accounts. Customers are given an interest rate when they sign up but it is subject to change at any time. There are some limitations on the money market account as well. Typically there are fees for withdrawing from your account more than the allotted amount. Even though a money market account does have a few stipulations they are still very popular ways to save money compared to that of a savings account as you do have the potential to earn more interest money.
Using a money market calculator
When you are deciding which money market accounts have the best rates, using the money market account calculator will be able to offer you a snapshot of what you have the potential to earn. The money market calculator offers information about the interest rate along with the deposited amount and the length of your account duration. Some of the other things the calculator will take into consideration include the annual percentage yield along with compounding interest. Using a money market calculator essentially offers you a tool to effectively manage your account and predict future savings. This tool is beneficial in comparing different interest rates from a handful of banks, giving you additional information and helping you to choose if you need to move your money into a different account. If you’re interested in finding out how much money you need to invest in your money market in order to be a millionaire at a certain age check out the money market millionaire calculator.
Why use money markets?
Investors that are looking for a short-term investment and way to increase their savings with a higher interest rate will benefit from a money market account. The investment is liquid so you can get your money out within seconds using a debit card or a check. There are fees and limitations on the number of withdrawals you can make each month but the interest rates are subject to raises (or drops) at any time, giving you a greater potential to earn more than you could with a savings account for short-term needs.
How do I find the best rates?
To find money market account rates that will pay you generously you will need to do some research. Using tools like the Ratecatcher.com comparison chart offers you a snapshot of the money market accounts that are currently paying the highest interest rates.